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Ben Campbell of the Fisher College of Business will present "Utility Players and Utility Functions: How Compensating Differentials Affect Rant Appropriation in the NBA."
Ben Campbell of the Fisher College of Business will present “Utility Players and Utility Functions: How Compensating Differentials Affect Rant Appropriation in the NBA” on Friday, December 7, from 1:00 to 2:30 p.m. in 2-215 Carlson School.
The compensating differentials literature offers logic that undesirable jobs command higher pay. This willingness to make tradeoffs between pay and non-pecuniary benefits is of great strategic significance since it may allow other stakeholders, such as shareholders, to capture more rents in the context of a competitive advantage. Campbell examines this using team-level data in the NBA from every regular season game spanning 2000-2009.
Results demonstrate that players forgo financial compensation to move to their hometown team and to move to a playoff team. Both findings support compensating differentials logic. However, when stars move home they appropriate a greater financial compensation than moving to a non-hometown team, which suggests that stars create more value at their hometown team.
This seminar is sponsored by the Department of Strategic Management and Organization.
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